Japanese Research Group Calls for ‘Appropriate’ ICO Rules

A research group in Japan has put forward a series of proposals related to initial coin offerings, including those focused on investor protection and money laundering prevention.

Spearheaded by a Tama University professor and general advisor Takuya Hirai, a member of Japan’s House of Representatives, the ICO Business Research Group features advisors such as Yuzo Kano, the CEO and co-founder of cryptocurrency exchange bitFlyer and includes members drawn from various financial institutions, venture companies, and private-sector businesses. The group was first formed last November.

“Appropriate rules must be set to enable ICO to obtain public trust and to expand as a sound and reliable financing method,” the report, released Thursday, reads.

Though not indicated in the Group’s publication, Bloomberg Technology reports that the proposals will be considered by the country’s financial regulator, the Financial Services Agency (FSA), later this month, with the possibility of eventually becoming law.

In February, a report indicated that the agency is considering the revision of existing laws and regulations to account for token sales. The FSA also issued a warning last October emphasizing the risks associated with ICOs.

Varied proposals

On the question of issuing and selling tokens, the group argued that issuers should provide a means for tracking the development of white papers, in addition to outlining “conditions for the provision of conveniences such as services and rules on the distribution of procured funds, profits, as well as residual assets, to investors of tokens, shareholders and debt holders.”

Likewise, the Group recommends that ICOs should be designed “to be acceptable to existing shareholders and debt holders,” and should not be used as a means of circumventing traditional financing methods.

In order to protect investors, the authors suggest that token issuers should comply with existing KYC methods in order to assess the suitability of investors and to confirm their identities. They also advocated for measures to prevent insider trading.

“Although there are a wide variety of issues to be considered and it would not be easy to find solutions for all of them. We hope the above proposals would contribute to future discussions by each related party.”

Crypto News promises to be a fair and objective portal, where readers can find the best information, recent crypto currency news. Newspaper is the best selling News Theme of all time and powers this amazing demo!